Tag Archives: Indicators

Conference board report on us economic indicators

The Conference Board Composite Indices are released periodically on a monthly basis by the Conference Board. The non-profit organization has been existence for the past 90 years and their indices have greatly valued by businesspersons around the globe for their relevance in presenting and predicting market dynamics. The data used for computing the indices for February is collected up to 12.00pm of 18th March 2009. Composite Indices are computed via five steps which include: monthly data are calculated for every component of the Composite index, any changes are incorporated to compute growth rates, monthly volatilities are ascertained, indices are calculated using symmetric change formula and rebased to an average of 100 using 2004 as the base year (Conference Board, 2009).

Review of the Composite Indices
1. The Conference Board Leading Economic Index (LEI)

The LEI decreased by 0.4% this February after having dropped by 0.1 % in both January 2009 and December 2008.  The leading economic index for February is 98.5(2004=100) against 99.5(2004=100) for January 2009 a one point decline over the period. From August 2008 to February 2009, the LEI dropped by 2.1% compared to a 1.6% decline during the six months to August 2008. This declining trend began way back in July 2007 few months before the beginning of recession.

The Conference Board Coincident Economic Index (CEI)

The CEI index fell further this February by 0.4% after declining by 0.6% and 0.7 % in January 2009 and December 2008 respectively. The February Coincidence Economic Index stood at 102.5(2004=100) down from 103.3(2004=100) in January recording a 0.8 decline. The CEI index had declined by 0.5 % both in November and December 2008 and dropped by 2.7% in the six months to January making the biggest since 1975.  This negative recording was necessitated by the decreasing industrial production and the falling unemployment across all sectors in the US economy.  The CEI index has been falling from November 2007 but accelerated in the past few months.

The Conference Board Lagging Economic Index(LAG)

The LAG further declined by 0.4% this February after falling by 0.3% and 0.1% in January 2009 and December 2008 respectively. The Lagging Economic Index also decreased from 113.9(2004=100) in January 2009 by 0.4 points to 113.5 (2004=100) this February. The LAG index had dropped by 0.3 % and 0.1% in January 2009 and December 2008 respectively (Conference Board, 2009).

Analysis of the US Composite Indices Components
1. Analysis of Leading Economic Index (LEI) components

Six out of ten components that make up the Leading Economic Index (LEI) increased in the month of February according to the Conference Board release on March 19th 2009.  The positive contributors in decreasing order are: the vendor performance measured by an index of supplier deliveries remained at 0.0677, similarly with building permits measured by new units of private housing stood at 0.0270, money supply measured by M2 at 0.3580 , manufactures’ new orders stood at 0.0774 for consumer goods and materials while that for non-defense capital goods is 0.0180. Whereas the four negative contributors in decreasing order are: the average weekly initial claims for unemployment insurance for February is 0.0307, the stock prices which stood measured by 500 common stocks stood at 0.0390, consumer expectations index is 0.0282 and lastly the average weekly manufacturing hours stood at 0.2549 (Conference Board, 2009)

2.  Analysis of Coincident Economic Index (CEI) Components

The CEI index is measured by four components. Two of these components contributed marginally to index namely; the personal income less transfer payments which stood at 0.1873 and the manufacturing and trade sales was 0.1191 for February and March. The negative contributors for February are the employees on non-agricultural payrolls and industrial production which were 0.5439 and 0.1497 respectively (Conference Board, 2009).

Analysis of Lagging Economic Index Components(LAGG)

The Lagging Economic Index is measured by seven components and for February 2009 the index had only one positive contributor, the consumer installment credit to personal income ratio which stood at 0.1872. Negative contributor’s value for commercial and industrial loans was 0.1127; labor cost per unit of output was 0.0608 while the Consumer Price Index for services was 0.1959.  The following components remained the same for February: average prime rate, manufacturing and trade inventories to sales ratio and the average duration of unemployment stood at 0.2825, 0.1238 and 0.0371 respectively (Conference Board, 2009).

Conclusions

Though the LEI recorded a decline this February, a closer look at the component reveals that they more or less balanced out. The market seems to be volatile enough as the credit crunch bites the economy.  Going by this index, we are likely to continue in the recession in the next financial year a time when prospects for expedited economic growth may not be forthcoming perhaps until 2010.

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Conference board report on us economic indicators

The Conference Board Composite Indices are released periodically on a monthly basis by the Conference Board. The non-profit organization has been existence for the past 90 years and their indices have greatly valued by businesspersons around the globe for their relevance in presenting and predicting market dynamics. The data used for computing the indices for February is collected up to 12.00pm of 18th March 2009. Composite Indices are computed via five steps which include: monthly data are calculated for every component of the Composite index, any changes are incorporated to compute growth rates, monthly volatilities are ascertained, indices are calculated using symmetric change formula and rebased to an average of 100 using 2004 as the base year (Conference Board, 2009).

Review of the Composite Indices
1. The Conference Board Leading Economic Index (LEI)

The LEI decreased by 0.4% this February after having dropped by 0.1 % in both January 2009 and December 2008.  The leading economic index for February is 98.5(2004=100) against 99.5(2004=100) for January 2009 a one point decline over the period. From August 2008 to February 2009, the LEI dropped by 2.1% compared to a 1.6% decline during the six months to August 2008. This declining trend began way back in July 2007 few months before the beginning of recession.

The Conference Board Coincident Economic Index (CEI)

The CEI index fell further this February by 0.4% after declining by 0.6% and 0.7 % in January 2009 and December 2008 respectively. The February Coincidence Economic Index stood at 102.5(2004=100) down from 103.3(2004=100) in January recording a 0.8 decline. The CEI index had declined by 0.5 % both in November and December 2008 and dropped by 2.7% in the six months to January making the biggest since 1975.  This negative recording was necessitated by the decreasing industrial production and the falling unemployment across all sectors in the US economy.  The CEI index has been falling from November 2007 but accelerated in the past few months.

The Conference Board Lagging Economic Index(LAG)

The LAG further declined by 0.4% this February after falling by 0.3% and 0.1% in January 2009 and December 2008 respectively. The Lagging Economic Index also decreased from 113.9(2004=100) in January 2009 by 0.4 points to 113.5 (2004=100) this February. The LAG index had dropped by 0.3 % and 0.1% in January 2009 and December 2008 respectively (Conference Board, 2009).

Analysis of the US Composite Indices Components
1. Analysis of Leading Economic Index (LEI) components

Six out of ten components that make up the Leading Economic Index (LEI) increased in the month of February according to the Conference Board release on March 19th 2009.  The positive contributors in decreasing order are: the vendor performance measured by an index of supplier deliveries remained at 0.0677, similarly with building permits measured by new units of private housing stood at 0.0270, money supply measured by M2 at 0.3580 , manufactures’ new orders stood at 0.0774 for consumer goods and materials while that for non-defense capital goods is 0.0180. Whereas the four negative contributors in decreasing order are: the average weekly initial claims for unemployment insurance for February is 0.0307, the stock prices which stood measured by 500 common stocks stood at 0.0390, consumer expectations index is 0.0282 and lastly the average weekly manufacturing hours stood at 0.2549 (Conference Board, 2009)

2.  Analysis of Coincident Economic Index (CEI) Components

The CEI index is measured by four components. Two of these components contributed marginally to index namely; the personal income less transfer payments which stood at 0.1873 and the manufacturing and trade sales was 0.1191 for February and March. The negative contributors for February are the employees on non-agricultural payrolls and industrial production which were 0.5439 and 0.1497 respectively (Conference Board, 2009).

Analysis of Lagging Economic Index Components(LAGG)

The Lagging Economic Index is measured by seven components and for February 2009 the index had only one positive contributor, the consumer installment credit to personal income ratio which stood at 0.1872. Negative contributor’s value for commercial and industrial loans was 0.1127; labor cost per unit of output was 0.0608 while the Consumer Price Index for services was 0.1959.  The following components remained the same for February: average prime rate, manufacturing and trade inventories to sales ratio and the average duration of unemployment stood at 0.2825, 0.1238 and 0.0371 respectively (Conference Board, 2009).

Conclusions

Though the LEI recorded a decline this February, a closer look at the component reveals that they more or less balanced out. The market seems to be volatile enough as the credit crunch bites the economy.  Going by this index, we are likely to continue in the recession in the next financial year a time when prospects for expedited economic growth may not be forthcoming perhaps until 2010.

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Stock trading and trend indicators

Trading in financial markets has never been easier and committing even a small mistake can result in loss of your money. Hence it is important for any person to be knowledgeable in trading activities.

You might have heard about many people who have successful in trading but for you to declare victory, you have to learn winning strategies in first place. To start with there are many strategies and techniques, people use in trading. But in this article we will limit ourselves to trend indicators.

By using trend indicators one can know how to trade stocks. It is a strategy that will help you assess the performance of the stock based on how it has performed in the past and how it will do in the future as well.

It is basically a way of following the markets and analyzes to invest. There are many types of trend indicators. In this article we will know what the different types of trend indicators are and how they are useful.

Moving average indicator: it provides a trend direction usually by smoothing price data. It is normally calculated based on the closing price of the stock. The time frame of the moving average can be shorter as well as longer. The shorter term moving averages are more sensitive and at the same time identify new trends quickly but also give more false alarms. Longer term moving averages are more reliable compared to shorter term moving averages but are less responsive.
MACD indicator: it is basically an enhancement of the moving average indicator. It helps the trader by measuring the distance between the two moving average lines. This indicator signals are used when MACD crosses its signal line and calculated as a 9 day exponential moving average of MACD.
MACD histogram: with MACD indicators, the signals tend to lag the price movements. To overcome this problem, MACD histogram is used to signal trend changes well in advance. But they are less reliable and should be confirmed by other indicators.
TRIX indicator: it is basically designed as an oscillator for trading trends. It provides you trends that are shorter or equal to window period.
Smoothed rate of change: it performs similar to momentum and rate of change indicators but at the same time it overcome some of the weakness like it is less erratic and gives fewer false signals and it ensure that the indicator will only bark once.
 Price envelops: this indicators are triggered when set percentage is above or below the moving average. They are used to determine the overbought and oversold levels.
Bollinger Bands: this indicator is used to confirm trading signals to indicate the overbought and oversold levels relative to moving average.
Directional movement: it helps you to analyze the ability of bulls or bears to move price outside the previous day trading range.
Parabolic SAR: when it is employed in trending market, it provides entry and exit points of the stock under observation.
Commodity channel index: it helps you to measure the position of the price in relation to its moving average. It is used to signal the overbought or oversold position of the market or to signal when the market is weakening.

Please note that this article is for educational purposes only and should not be considered financial advice.

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Forex Trading Indicators

When applied properly, forex trading indicators will assist you to achieve excellent earnings and extremely enhance your opportunity of profiting within the market. So how do you find and use these indicators and use them wisely?

Very first you might need to know that there’s nobody indicator which will perform perfectly and shows a clear signal of a purchasing or promoting signal. Each and every forex trading indicator generators either acquiring or promoting or each signals. You’ll find also a signal produce by these indicator and that’s the noise signal. This will be the signal that you just usually do not want to follow as they are “fake” signals. On the other hand you might not know that they’re fake signals unless you combine one or far more indicators to work together in a chart. The indicators signals cancel of each other noises and produce a clearer buy and sell signals. You may only optimize your indicators to create much more accurate results but not the best outcomes.

Trends are your buddies when trading forex. You might also want at the least one indicator to indicate the trend of the forex for you to follow. Probably the most simple rule of trading is that you ought to by no means trade against the trend. Trading against the trending will danger you losing far more very easily.

Sufficient of explaining, let us see what are some of the most generally used forex trading indicators around and how can it helping your trading. The Uncomplicated Moving Averages is an indicator that makes use of a sure period of the closing rates and does some calculated averages to create a worth. This value joins up and make up a line. This line is usually use to help inside your trading sessions.

The subsequent used forex trading indicators is Bollinger Bands. This is a really beneficial indicator that shows which currency is over bought or oversold. An oversold currency indicates the tendency to rise in worth in any moment, though the over bought currency indicates the tendency to rise in worth in any given second. This can aid the trader to catch what we call trend reverse.

The Relative Strength Index or what’s referred to as RSI, also shows the oversold or over bought status of the currency. It is generally employed as a primary indicator of oversold and over purchased signal apart from Bollinger Bands or other oversold or over purchased indicator.

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Forex Trading Indicators

When used correctly, forex trading indicators will help you gain great profits and higly increase your chance of profiting in the market. So how do you find and use these indicators and use them wisely?

 

First you will to know that there is no one indicators that can perform perfectly and shows a clear signal of a buy or sell signal. Every forex trading indicator generators either buy or sell or both signal. There are also a signal generate by these indicator and that is the noise signal. This is the signal that you do not want to follow as they are “fake” signals. However you will not know that they are fake signals unless you combine one or more indicators to work together in a chart. The indicators signals cancel of each other noises and produce a clearer buy and sell signals. You can only optimize your indicators to produce more accurate results but not the perfect results.

 

Trends are your friends when trading forex. You may also want at least one indicator to indicate the trend of the forex for you to follow. The most basic rule of trading is that you must never trade against the trend. Trading against the trending will risk you losing more easily.

 

Enough of explaining, let us see what are some of the most commonly used forex trading indicators around and how can it helping your trading.

The Simple Moving Averages is an indicator that uses a certain period of the closing prices and does some calculated averages to produce a value. This value joins up and make up a line. This line can be use to assist in your trading sessions.

The next used forex trading indicators is Bollinger Bands. This is a very useful indicator that shows which currency is overbought or oversold. An oversold currency indicates the tendency to rise in value in any moment, while the overbought currency indicates the tendency to rise in value in any given moment. This can help the trader to catch what we call trend reverse.

The Relative Strenght Index or what is called RSI, also shows the oversold or overbought status of the currency. It is usually use as a main indicator of oversold and overbought  signal other then Bollinger Bands or other oversold or overbought indicator.

When using forex trading indicators, there are no one indicator that perfect. It is all about exploring and experimenting with different combinations to get the best most accurate signals to profit in the market.

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